Real-time WMS, RFDC raise productivity for Lucent Technologies
A new generation of RF terminals and bar code scanners, tied into new warehouse software, enables Lucent associates to pick and putaway items at higher levels of performance.;Receiving is a high-volume operation. From some 13,000 cartons received weekly, about 10% will be crossdocked; more than 8,000 cartons will go into high-stack storage while 2,400 cartons or so will move into bin shelving.;Narrow-aisle high-stack storage includes this area served by a rail-guided, unit-load crane.;Real-time WMS gets mor
By Tom Feare; Lisa A. Goetze -- Modern Materials Handling, 2/1/1998
Bell Labs' longtime tradition of pursuing innovative, new technology continues with Lucent Technologies, the AT&T spinoff and telecommunications giant. Innovation is part of the corporate culture. Even so, when the company upgraded its Mesquite, Texas warehouse to keep pace with rapid growth and other changes, Lucent managers didn't have a big, blank check to put in all new equipment and systems.Instead, Lucent chose to overlay a new, proven software system and associated equipment on top of the existing warehousing infrastructure in order to maximize the investments already made in the facility near Dallas, Texas.
A key goal in the upgrade was to "improve business operations, not just replace technology," recalls Emil Sommerlad, manager, business systems implementation. "We wanted to lay a foundation to achieve best practices. And we sought a solution that would be flexible and adaptable to future changes while providing improved control."
A real-time, task-driven warehouse management system (WMS) became the core of changes made thus far to a 100,000 sq ft "storeroom." This warehouse feeds components to a factory of 1 million sq ft and its 40 subassembly shops. Here, Lucent's Network Products Group makes electronic equipment such as power supply systems and components for other manufacturers, as well as its own business.
Modifications to the WMS software to fit the package to Lucent's warehouse and its specific requirements "were kept to a cost-justifiable minimum," says Cindy Seale, warehouse industrial engineer. Other constraints included not making significant changes to the facility's layout and to its materials handling equipment. And, finally, the operating model had to be implemented in less than 10 months.
Signals of success
With the WMS (HK Systems)- along with the installation of a newer generation of RF data collection terminals and bar coding equipment-all in place and running, Lucent has rung up major productivity gains and other benefits: Overtime hours now total about a third of what they had been. Warehouse associates process some 2,000 to 3,000 picking transactions per day now, versus 1,800 on their best day previously. Gone is a highly congested receiving dock area. Storage space utilization has increased by 20-30%. And that's not all of the advantages of the upgrades.
Achieving these results didn't happen overnight. Even with minimal customization, a WMS is far from a plug-and-play software installation. Sommerlad notes how implementing this complicated, real-time system required a detailed, proven methodology. And the project took some 900 workdays by Lucent personnel over a nine-month period, starting in July 1996.
Rapid change at Lucent
But this level of effort was necessary. Lucent was-and still is-experiencing "rapid and significant changes," says Sommerlad. Among them: Major growth opportunities of some 25-40% yearly put pressure on warehousing to operate more efficiently, more like a world class operation. Customer service requirements are changing: more orders now come in for a "ship complete" response, for example. And, of course, Lucent now is split off from AT&T.
"Continuing to try to use old, home-grown software for receiving," as Sommerlad explains, "running on obsolete hardware and being dependent upon an obsolete database manager were among the factors that led us to look for a replacement system." Existing software systems didn't communicate with one another, he adds, which resulted in poor space management in the warehouse.
Worse yet, from a materials handling perspective, Lucent had a two-stage receiving process. All incoming materials had to be double handled.
Out on the docks the congestion these conditions caused was evident. "We would have up to 10 rented trailers for auxiliary storage and there'd be as many as 30 trucks awaiting unloading. Materials would be stacked in the receiving area," recalls Larry Blalock, receiving supervisor. "Now, I can take you out on the docks and it's totally clear of any staged materials," Blalock adds, proudly.
Similar inefficiencies were evident in other warehousing steps. "Manual intervention to find storage locations was prevalent in putaway," says Kathy Moore, systems implementation specialist. And at the in-house customer-the adjacent Lucent factory-the practice was just to drop off materials from the warehouse, without performing a bar-coded transaction record of each such delivery.
Moving to a WMS
With the switch to a WMS decided, Lucent managers set certain expectations and goals for what the software would deliver and what would be required. Sommerlad knew that WMS customization would be re-quired. But the WMS software should be modified only to the point that it could be cost justified.
"Maximizing the productivity of the workforce throughout the storeroom pipeline, not just in individual functional areas," Sommerlad says, "was an important goal.'' Other objectives included having an WMS that supports FIFO (first-in/first-out) inventory rotation, that maximizes storage location utilization, and that promotes accurate inventory tracking of components.
Lucent's WMS manages warehouse operations that include 4,000 high-stack, or rack, locations, 30 rows of shelving with up to 45,600 locations, and a conveyor system to move materials within this "storeroom" (see layout page 35) that holds some 30,000 individual components.
One-stage receiving
Receiving is now a one-stage process under the WMS with virtually no double handling.
Lucent now requires that carriers call ahead to schedule a delivery time. The dock supervisor determines a delivery time for the carrier based on the size of the receipt and available receiving capacity. Upon arrival, the truck is unloaded, and the total quantity of the shipment is checked against the freight bill. Once the carton counts are verified, the freight bill is signed off and the material is staged for receiving according to package type. Bulk receiving lanes are used for staging bulk product and interworks that are palletized or shrink-wrapped.
The dock is divided into four areas: carton staging, bulk staging, cross docking, and special handling. The carton staging area receives material that arrives as single cartons or cartons that have a high probability of putaway to the bin shelving area. Bulk staging is used for any bulk receipts, including internal goods or any items that have a high probability of being putaway in the high stack areas.
More items crossdocked
Crossdocking has greatly improved with the help of the WMS. Most crossdocked items are "dock to shop" materials. Typically, 1300 cartons-or about 10% of all cartons received weekly- are crossdocked.
Material staged in each of the areas goes through a single receiving step. The receipt is checked to ensure that the vendor is complying with the vendor packaging specifications. If the vendor is not in compliance, someone from inspection enters the information into software for tracking purposes. Information such as the P.O. number, item, counted quantity, and carrier information for the delivery is entered into the WMS. When all information has been entered, the system automatically prints bar coded identification labels for each load that's been received.
Material then moves to a putaway location, the inspection area or directly to the shop. The system also consolidates inventory by directing items with the same SKU to the same location when possible.
Received items are routed for putaway in high stack or bin shelving areas. Items destined for bin shelving travel via conveyor to the appropriate divert point. Materials for the high stack area are transported to the putaway sorting area directly from the dock area.
For putaway, the operator scans the carton label to determine the destination location, which is displayed on the RF terminal.
With implementation of the system, putaway efficiency has improved 50%.
Queuing, tracking materials
The WMS also enables Lucent to queue all picking requests pending putaway of goods, to allocate from staging, and to track materials throughout the warehouse. Similarly, there's precise delivery verification so material is tracked by bar coding to the point of use on the factory floor in the 40 subassembly shops or as outbound shipments to external customers.
An operator in the accumulation area sets up the delivery carts for all MRP orders to be picked during the day based on a daily report. Each of these MRP orders has "sub-orders," which are several line items in the order designated for transport to a particular area on the shop floor.
In addition, a modification to the WMS software provides the capability to accept on-line, Kanban replenishment orders. These orders are picked and added to the delivery carts destined for the shop floor.
Only piece-picked items have dedicated forward pick locations. All other products are stored in a random zone fashion. This system allows for efficient picking and efficient use of valuable warehouse storage space.
Greater flexibility
With the system's 42 RF terminals and real-time operation and communication, there's far more flexibility to assign tasks to employees. Work detail records can be changed quickly so a picker's tour is organized more efficiently than before.
After items are picked, a conveyor transports them to the accumulation area. For bulk items, the selector drops the load in the accumulation area for processing. As items arrive in the accumulation area, an operator scans each item's pre-printed load identification label. The WMS generates the customer label with the required shop floor information. The printed label is applied to the item and the item is sorted based on order and sub-order destinations.
When the order is complete, all carton and bulk items belonging to that order are moved to the appropriate shop floor location. The destination location ID label is scanned, verifying delivery of the order. The WMS updates the MRP system to confirm delivery.
WMS benefits
Lucent now gets much more out of its existing warehouse. For example, software-driven location management has improved storage/staging space utilization to a level 20-30% better than before, Sommerlad points out.
Even with high volumes of transactions, the WMS delivers solid results: The software performs an average 2,500 receiving and 3,500 picking transactions/ week. "Service levels for each kind of transaction are now consistently above 95%," says Sommerlad. The warehouse management system has cut receipt-to-factory floor leadtimes by about 50%. Meantime, inventory data accuracy averages at least 95%, he adds.
Future plans
"The conversion from our home-grown storeroom system to a commercial WMS package," says Sommerlad, "was extremely success- ful. Now our job is to continue to improve and upgrade our operations to utilize all of the functionality this system provides."
System Snapshot
Lucent Technologies Network Products Group, Mesquite, Texas
Warehouse systems upgrade manager: Emil Sommerlad
Product distributed: Power systems and components
Customers: OEMs, Lucent Technologies
Facility size:100,000 sq ft
SKUs handled: 40,000
Value of inventory: $50 million
Number of employees: 70
Warehouse management system: HK Systems 414-860-6635
RF data collection system: Teklogix Inc. 606-371-6006
Conveyors:Buschman 800-347-9100
Bar code scanners: Teklogix
Narrow-aisle order picking trucks: Raymond 607-656-2311
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